As a new Medicare drug benefit year begins, the Centers for Medicare & Medicaid Services has issued final regulations that will directly affect such critical program aspects as patient costsharing, renewal policies, and eligibility for Medicare Advantage Special Needs plans which serve some of the nation’s sickest and poorest patients.
In regulations published last month and expected to be implemented in January 2010, CMS has directed Part D plans to base patient co-payments on the payments that are due to the pharmacist or other dispenser – rather than on the payment the plan may make to a pharmacy benefits manager handling the prescription drug benefit. The change is expected to reduce copayments because patients will no longer have to pay the administrative costs of handling every dispensed prescription.
VCU Health Systems Outpatient Pharmacy Manager Laurel Marsden noted that nearly one-third of every health care dollar goes toward administrative costs. “I'm all for decreasing these costs whenever and wherever possible” she said. “Decreasing the copayment for the patient is a huge plus. And while it’s true that reducing the co-pays will decrease my revenues, my overall bottomline will not be affected that much as Part D is such a small percentage of our overall volume.” That, she said, makes the revision a “win-win.”
SNHPA voiced concerns
CMS responded to an issue Safety Net Hospitals for Pharmaceutical Access (SNHPA) raised in June 2008. SNHPA had told CMS it was worried that defining the so-called “negotiated price” on which co-payments are based as the price of the product at point of sale could encourage Part D plans to require 340B pharmacies to charge Part D patients 340B prices. CMS says that was not the intent of the change.
CMS says pharmacies should agree with all terms of a Part D contract before executing the contract with a Part D plan. The negotiated price language still bothers Marsden, despite CMS’s assurances.
“If I am required to pass 340B prices with my Part D adjudications, I would seriously consider having these patients obtain their prescription medication at an outside retail pharmacy. I cannot cover my costs with the 340B cost and a nominal dispensing fee,” she said. CMS says that it expects the change to the co-payment provision to provide more transparency to Medicare drug plans, but cautioned that it may also drive up plan premiums as patients will no longer help pay for the plan’s administrative costs.
In another change designed to reduce co-payments, the CMS regulations state that a Part D patient must be charged the pharmacy’s negotiated price when that price is less than the cost-sharing that would otherwise be charged by the plan. At the same time, the regulations allow nominal co-payments paid to manufacturer patient assistance programs for drugs provided outside a Part D plan to be counted toward the patient’s out-of-pocket expenses, known in the Medicare program as TrOOP.
This would help patients move faster through the so-called “donut hole,” or coverage gap, and reach catastrophic coverage where Medicare pays 95 percent of their drug costs.
Coverage for Spouses Ends
A change that may have a negative impact on patients enrolled in Medicare Advantage Special Needs Plans are stricter eligibility requirements that kick in Jan. 1, 2010. Until now, those plans were required only to enroll a greater proportion of Special Needs individuals than occur nationally in the Medicare population. This allowed spouses of patients covered under Medicare Advantage to enroll as well. The new regulatory change limits enrollment in special needs plans to patients who are institutionalized or suffering from severe chronic conditions, and to patients who are covered by both Medicaid and Medicare (so-called dual eligibles), ending the spousal privilege.
Making enrollment easier, less stressful for patients
The agency is also promising that future letters to Medicare patients that outline changes to their plans will be more readable and user-friendly. A Government Accountability Office (GAO) report released in December said notices mailed to beneficiaries contain “too much, often irrelevant, information.” Notices should be written in short sentences and an active voice, and that they should avoid technical terms and use more tables and headlines for easier communication, GAO said.
Inside Health Policy reports that CMS is also considering creating a new interval period between the end of the Part D enrollment open season and the start of new coverage. It would be based on another recommendation by the GAO, which found that 15 percent of beneficiaries who chose to switch plans in 2008 were not enrolled in their new plan by January 1. The prescription drug enrollment period begins Nov. 15 and ends Dec. 31 for the benefit years that begin Jan. 1.
The current timeline does not allow Medicare enrollees adequate time to consider alternative plans, the GAO said, noting that Medicare Part B allows for a three-month processing interval. More than half of plan sponsors interviewed for the report supported the creation of an enrollment processing interval, GAO reported.
Call letter withdrawn
CMS has issued a “call letter” asking Medicare Part D and Medicare Advantage plan sponsors to begin preparing their bids for next year. At this point, however, the schedule included in the draft call letter to plan sponsors does not show a longer enrollment period.
The call letter was withdrawn two days after President Barack Obama took office, which is consistent with his administration’s instruction to federal agencies to put all pending regulations on hold.